Mixed Bag For Hospitality at Level 1

Alert Level 1 saw the hospitality industry return to unrestricted trading. A new survey conducted by the Restaurant Association has shown that the new normal has been a mixed bag for operators with revenues variable by area and type of establishment.

Overall feedback from members indicated a better trading week than at level 2 but with 55 percent of respondents still indicating lower or significantly lower revenues than the same period last year.

In Canterbury 56 percent said that trading compared to last year was the same or better which point to the higher number of suburban eateries enjoying increased frequency from those continuing to work locally.

In Auckland and the Southern Lakes only 29 percent and 25 percent respectively stated that the revenues were the same or better than last year, with 71 percent of businesses in Auckland and 75 percent in the Southern Lakes stating that revenues were less or significantly less. Wellington also sees a drop with only 42 percent reporting equal or greater trading revenues.

Whilst revenues may be down, many are reporting only small falls in foot traffic indicating a drop in average spend per customer.

Member feedback overall indicated customer traffic is around 91-100 percent customer traffic compared with the same period last year. This is significantly lower for Southern Lakes and Auckland businesses who are reporting a fall in foot traffic, currently sitting at between 41-50 per cent and of 71 to 80 per cent respectively of typical levels.

Cafes and bars appear to be doing better than restaurants and food to go with 53 percent of cafes and 45 percent of bars reporting reduced year on year trading versus 62 percent restaurants and 70 percent food to go. Kiwis were clearly missing bars and pubs and clubs with 35 percent of establishments in this category reporting higher trading revenues than the same period last year.

“Hospitality spend seems to be a little bit erratic since our move to Level 1,” said Restaurant Association CEO Marisa Bidois. “From speaking to members we’re seeing reduced footfall in Auckland specifically with reports of better weekend spending but reduced weekday footfall. The move toward working from home will almost certainly be impacting those city centre establishments set up to service the mid-week work crowd.”

Overall, around half of owners were planning to apply for the wage subsidy extension indicating that businesses had either restructured or were falling under the forty percent revenue drop. 54 percent of café owners, 44 percent of restaurant owners, 64 percent of food to go operators and 58 percent of bars indicated that they would not be applying for the extension to the wage subsidy.

“Footfall across the rest of the country appears to be only slightly reduced but with revenues continuing to be lower in almost all regions, we are seeing a reduced spend per customer. Canterbury appears to be the exception with establishments reporting a significant increase compared with the same period last year,” Bidois added.

“Winter is typically slower than the warmer months for hospitality sales but with so many Kiwis unable to travel internationally this year we’re hopeful that people will take full advantage of the amazing eateries this country has to offer.”